MSR Sale Tests Current Market

As this issue of MSN went to press, Hamilton, Carter, Smith & Co. here was brokering the sale of servicing
rights on $1.7 billion of Freddie Mac loans at current interest rates in a deal that will test the market for current coupon deals.

The trading of servicing rights has been severely diminished by falling interest rates over the past two years. The HCS deal, on
which bids were due April 16, was seen as a test the market's appetite for servicing rights on home loans at current interest rates,
said HCS president Gregory Bennett.

"I haven't seen anyone go to market with anything like this. There hasn't been any real test of market value for a long time," he
said.

The portfolio includes 8,074 loans with an average principal balance of $206,355. It has a weighted average coupon rate of
5.742% and a weighted average net servicing fee of 28 basis points.

About 67% of the portfolio consists of wholesale-originated loans, and 33% were retail originated. The portfolio is national in
scope, with about 39% coming from California.